DATE:	June 30, 2010
TO:	Office of Commission Clerk (Cole)
FROM:	Division of Regulatory Analysis (Polk, Casey, Fogleman) Office of the General Counsel (Murphy)
RE:	Docket No. 090507-TP – Petition for Designation as Eligible Telecommunications Carrier (ETC) by T-Mobile South, LLC.
AGENDA:	07/13/10 – Regular Agenda – Proposed Agency Action - Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			New Commissioner 1
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			This recommendation should immediately precede the recommendation in Docket No. 090510-TP.
FILE NAME AND LOCATION:			S:\PSC\RAD\WP\090507.RCM.07 -13-10.DOC

 

 Case Background

T-Mobile South LLC (T-Mobile or Company) is a Commercial Mobile Radio Service (CMRS) provider licensed by the Federal Communications Commission (FCC) to provide service in the Jacksonville, Tampa-St. Petersburg-Orlando, Miami-Fort Lauderdale, and New Orleans-Baton Rouge Major Trading Areas.  On November 10, 2009, T-Mobile filed a petition requesting designation as an Eligible Telecommunications Carrier (ETC) in the non-rural areas of BellSouth/AT&T (AT&T) and Verizon Florida (Verizon).  In a separate filing made on November 12, 2009,[1] T-Mobile filed a petition for designation as an Eligible Telecommunications Carrier (ETC) in the rural areas of CenturyLink, Frontier, Indiantown, NEFCOM, TDS, Smart City, and Windstream.      

            T-Mobile filed separate rural and non-rural petitions for ETC status due to the public interest standards for ETC designations.  Historically, public interest standards for ETC designation are higher in rural areas.  Since ETCs in rural areas can seek high-cost funding from the Federal Universal Service Fund (USF), states may consider such matters as the level of federal high-cost per-line support to be received by ETCs.  State commissions may give more weight to certain factors in the rural context than in the non-rural context and the same or similar factors could result in different public interest determinations, depending on the specific characteristics of the proposed service area, or whether the area is served by a rural or non-rural carrier.

 

This docket addresses T-Mobile’s petition for ETC status in the non-rural wire centers of BellSouth/AT&T and Verizon, identified in Attachment A, for the purpose of receiving federal universal service support.  On March 13, 2007, the Florida Public Service Commission (FPSC or Commission), addressed the issue of whether or not the FPSC has jurisdiction to designate CMRS providers as ETCs.  By Order No. PSC-07-0288-PAA-TP, issued April 3, 2007, in Docket Nos. 060581-TP and 060582-TP, the FPSC found that with the enactment of Section 364.011, Florida Statutes, the Florida Legislature has granted the FPSC limited authority over CMRS providers for those matters specifically authorized by federal law.  Therefore, pursuant to §214(e)(2) of the Telecommunications Act of 1996, which authorizes states to designate ETC carriers, the FPSC has jurisdiction over CMRS providers for the purpose of considering ETC petitions.

 

 

Discussion of Issues

Issue 1: 

 Should T-Mobile be granted ETC designation in the state of Florida?

Recommendation: 

 Yes.  Staff recommends that T-Mobile’s petition for ETC designation in the non-rural AT&T and Verizon wire centers listed in Attachment A of this recommendation be granted.  If the Commission approves T-Mobile for ETC status, staff will review T-Mobile’s commitment to Florida’s Lifeline program during T-Mobile’s annual certification for High-Cost Universal Service Funds. (Polk, Casey, Fogleman)

Staff Analysis:  Pursuant

 to FCC rules and governing statutes, the state commissions have the primary responsibility to designate providers as ETCs.[2] Designation as an ETC is required in order for a provider to be eligible to receive monies from the federal USF.  Section 254(e)(2) of the Act provides that “only an eligible telecommunications carrier designated under Section 214(e) shall be eligible to receive specific federal universal service support.”  According to Section 214(e)(1), a common carrier designated as an ETC must offer and advertise the services supported by the federal Universal Service mechanisms throughout a designated service area.

 

ETC Certification Requirements

 

            The Code of Federal Regulations addresses a state commission’s responsibilities related to an ETC designation:

 

Upon request and consistent with the public interest, convenience, and necessity, the state commission may, in the case of an area served by a rural telephone company, and shall, in the case of all other areas, designate more than one common carrier as an eligible telecommunications carrier for a service area designated by the state commission, so long as each additional requesting carrier meets the requirements of paragraph (d) of this section.  Before designating an additional eligible telecommunications carrier for an area served by a rural telephone company, the state commission shall find that the designation is in the public interest.[3]

To qualify as an ETC, a carrier must provide nine services identified in 47 CFR 54.101.  The services are:

(1)    Voice grade access to the public switched network  Voice grade access is defined as a functionality that enables a user of telecommunications services to transmit voice communications, including signaling the network that the caller wishes to place a call, and to receive voice communications, including receiving a signal indicating there is an incoming call;

 

(2)    Local Usage Local usage indicates the amount of minutes of use of exchange service, provided free of charge to end users;

 

(3)    Dual-tone multi-frequency signaling or its functional equivalent Dual-tone multi-      frequency ("DTMF") is a method of signaling that facilitates the transportation of signaling through the network, thus shortening call set-up time;

 

(4)    Single-party service or its functional equivalent Single-party service is telecommunications service that permits users to have exclusive use of a wireline subscriber loop or access line for each call placed, or in the case of wireless telecommunications carriers which use spectrum shared among users to provide service, a dedicated message path for the length of a user's particular transmission;

 

(5)  Access to emergency services  Access to emergency services includes access to services, such as 911 and enhanced 911, provided by local governments or other public safety organizations; 

 

(6)  Access to operator services Access to operator services is defined as access to any automatic or live assistance to a consumer to arrange for billing and/or completion of a telephone call;

 

      (7)  Access to interexchange service  Access to interexchange service is defined as the use  of the loop, as well as that portion of the switch that is paid for by the end user, or the        functional equivalent of these network elements in the case of a wireless carrier,      necessary to access an interexchange carrier’s network;

 

      (8)  Access to directory assistance  Access to directory assistance is defined as access to a              service that includes, but is not limited to, making available to customers, upon request,          information contained in directory listings; and

 

(9)   Toll limitation for qualifying low-income consumers  Toll limitation or blocking restricts all direct-dial toll access.

 

In addition to providing the above services, 47 CFR 54.405(b) specifies that ETCs must publicize the availability of Lifeline service in a manner reasonably designed to reach those likely to qualify for the service.

Additional ETC Certification Requirements

 

            In addition to requiring the above services, on March 17, 2005, the FCC issued a Report and Order that established additional criteria that all ETC applicants must satisfy in order to be granted ETC status by the FCC.  In this Order, the FCC determined that an ETC applicant must also demonstrate:

 

1)      a commitment and ability to provide the supported services throughout the designated area;

2)      the ability to remain functional in emergency situations;

3)      ability to satisfy consumer protection and service quality standards;

4)      provision of local usage comparable to that offered by the incumbent LEC; and

5)      an acknowledgement that the applicant may be required by the FCC to provide equal access if all other ETCs in the designated service area relinquish their designations pursuant to Section 214(e)(4) of the Act.

            The FCC encouraged states to also adopt these criteria, and the FPSC has done so in Docket No. 010977-TL, by Order No. PSC-05-0824-TL, issued August 15, 2005.

Staff has reviewed T-Mobile’s petition for designation as an ETC in Florida, as well as additional documents filed with the FPSC.  Staff has verified that T-Mobile has complied with the above requirements to be eligible as an ETC in Florida and T-Mobile has also demonstrated its ability to provide the nine services identified in 47 CFR 54.101.

Public Interest Determinations

            Under Section 214 of the Act, the FCC and state commissions must determine that an ETC designation is consistent with the public interest, convenience, and necessity for rural areas.  They also must consider whether an ETC designation serves the public interest consistent with Section 254 of the Act.  Congress did not establish specific criteria to be applied under the public interest tests in Section 214 or Section 254.  However, the FPSC has determined that before designating a carrier as an ETC, it should make an affirmative determination that such designation is in the public interest, regardless of whether the applicant seeks designation in an area served by a rural or non-rural carrier.[4]

            In its petition, T-Mobile states that it meets all of the requirements for designation as an ETC by providing the supported services, committing to serve all consumers throughout its designated service area, offering a Lifeline service consistent with all applicable requirements, advertising the availability of its universal service offerings, participating in the Florida automatic enrollment process, and furthering the goals of the universal service program.            T-Mobile also states that designating the company as an ETC is in the public interest because consumers will benefit from competitive pricing, new services, a higher level of service quality, and better customer service.  In addition, the company believes that its designation as an ETC will not adversely impact the USF.

 

            Historically, competitive wireless ETCs in Florida, which receive high-cost money from the USF, have reported poor Lifeline enrollment numbers.[5]  In its petition, T-Mobile provided a sample of its Lifeline advertising for North Carolina where it received ETC status.  Staff checked the Universal Service Administrative Company (USAC) database to determine how much high-cost USF money T-Mobile received in North Carolina and how much low-income reimbursement it received for providing Lifeline service.  In 2009, T-Mobile received $856,721 in high cost funds from the USF while receiving $11 per month reimbursement for providing Lifeline service in North Carolina.  The $11 Lifeline reimbursement per month translates into one Lifeline customer in North Carolina. 

 

            T-Mobile has also received ETC designation in Puerto Rico. For 2009, T-Mobile received $14,479,632 in high cost funds from the USF while receiving between $22,961 and $23,879 per month reimbursement for providing Lifeline service in Puerto Rico.  That translates into between 2,296 and 2,387 Lifeline customers per month.  If the Commission approves T-Mobile for ETC status, staff will review T-Mobile’s commitment to Florida’s Lifeline program during T-Mobile’s annual certification for High-Cost Universal Service Funds.

 

Interstate Access Support

 

            In its petition, T-Mobile is requesting designation as an ETC in the non-rural AT&T and Verizon territories for the purposes of receiving low-income and one element of high-cost support from the USF.  If ETC designation is approved by the Commission in these non-rural areas, T-Mobile would be eligible to receive low-income funds for Lifeline, Link-Up and toll limitation service, in addition to high-cost Interstate Access Support (IAS) from the USF.  IAS is available to competitive carriers operating in the service areas of price-cap incumbent carriers (mostly non-rural and some rural carriers) and designated as ETCs by their state commissions or the FCC.  IAS helps to offset interstate access charges to reduce long distance charges for customers.  Because the FCC placed a cap on the annual competitive ETC support, designation of T-Mobile as an ETC will not increase the size of the Federal Universal Service Fund.

T-Mobile’s Lifeline Offering

 

T-Mobile states that it will pass through all applicable state and federal service discounts and mandated service support to its Lifeline and Link-Up customers, thus reducing the price of access to telecommunications services for the Lifeline and Link-Up eligible customers in Florida.  T-Mobile’s Lifeline offering includes the following:

·      Lifeline customers will receive a discounted or free handset based upon the contract term and type of phone;

·      Lifeline customers will be provided with 145 whenever minutes, 500 night minutes, and 500 weekend minutes per month for $6.49 per month ($19.99 plan with $13.50 Lifeline discount applied);

·      Minutes will not be rolled over from month to month;

·      Lifeline customers sign a contract with a term of one or two years if they obtain a new discounted handset.  If a Lifeline customer does not wish to obtain a discounted handset, the customer need not sign a contract to obtain service;

·      Participants will pay a one-time $17.50 service activation fee (half of the standard $35 customer activation fee).

           

Transitional Lifeline

 

To comply with the requirement of Transitional Lifeline,[6] T-Mobile stated that it will comply with the requirement of providing a 30 percent monthly discount off its non-discounted Lifeline rate plan for 12 months to customers no longer qualifying for Lifeline. 

Lifeline Advertising

 

T-Mobile will advertise the availability and rates for the services described above in its Florida service areas using media of general distribution as required by 47 U.S.C., 214(e)(1)(B).  T-Mobile will target locations where consumers receive benefits that make them eligible for Lifeline services, including various state and local social service agencies, to inform customers of the availability of its Lifeline services.  T-Mobile will coordinate its efforts with public and private assistance agencies to ensure the availability of Lifeline services reaches the broadest audience possible.  T-Mobile also will develop outreach efforts for non-English speakers, and increase awareness of the Lifeline program at existing third-party retail outlets through distribution of brochures.  Finally, T-Mobile will promote its Lifeline offerings to its existing customers, many of whom will qualify for Lifeline, through emails and text messaging campaigns.

Facilities Requirement

In accordance with 47 C.F.R. 54.201(d)(1), a company must offer the services that are supported by the federal universal support mechanisms either using its own facilities or a combination of its own facilities and resale of another carrier’s services.  T-Mobile is a facilities-based wireless telecommunications carrier with its own switching, transport, cell sites, and associated telecommunications facilities in its proposed designated ETC service area.  While an ETC can meet its universal service obligations by combining its own facilities with the resale of another carrier's services, T-Mobile intends to use its own facilities to meet its universal service obligations.  As an ETC, T-Mobile will use universal service support to support and enhance its network facilities in its proposed designated service area.

Upon designation as an ETC, T-Mobile states that it will provide the supported services throughout the specific exchanges in Attachment A and offer Lifeline service to qualified low-income consumers as required by the rules and orders of this Commission, thereby advancing universal service in Florida.  To the extent T-Mobile's network covers a potential customer's premises, T-Mobile will provide service on a timely basis, and, in those instances where a request comes from a potential customer within T-Mobile's licensed service area but outside its existing network coverage, T-Mobile will provide service within a reasonable period of time by: (1) modifying or replacing the requesting customer's equipment; (2) deploying a roof-mounted antenna or other equipment; (3) adjusting the nearest cell tower; (4) adjusting network or customer facilities; (5) reselling services from another carrier's facilities to provide service; or (6) employing, leasing, or constructing an additional cell site, cell extender, repeater, or other similar equipment.  If T-Mobile determines that it cannot reasonably serve a consumer, it states it will report the unfulfilled request within 30 days after making such determination.

Summary

Granting T-Mobile ETC status in Florida would provide Lifeline eligible customers in Florida another option for wireless telephone service.  For customers who have been disconnected from other carriers due to non-payment, T-Mobile provides alternative service  which includes optional prepaid long-distance services and toll restriction services to customers.  T-Mobile intends to educate customers about the option of toll blocking and prepaid long-distance, in hopes of reducing toll charges for customers.

T-Mobile has indicated that its accounts with the FCC and the USAC are current, and it is not aware of any outstanding complaints or violations with either entity.[7]  As part of the petition process, T-Mobile has agreed to abide by the Commission’s rules, such as the procedures for approving, denying, and terminating recipients, timelines for submitting reports, and expectations pertaining to the Lifeline and Link-Up programs.  T-Mobile commits to use federal universal support only for the provision of services for which the support is intended.

T-Mobile has acknowledged the requirements of the Florida Lifeline program, and it has agreed to adhere to the program which provides qualified customers a total of $13.50 in Lifeline assistance credits consisting of:  $6.50 in federal subscriber line charges, $1.75 in federal support for states that have approved the credit, and $1.75 which is a 50% match of federal support for having a state lifeline program requiring a $3.50 credit under the Florida eligibility criteria.  T-Mobile indicates that it will provide the $3.50 credit to qualified clients, advertise the availability of Lifeline, and begin offering these services within 60 days of receiving ETC status. 

Conclusion

            Staff believes that T-Mobile will promote the availability of universal service to the underserved, economically disadvantaged telephone customers in Florida.  Based on staff’s review, along with T-Mobile’s commitment to abide by both state and federal rules and procedures, staff believes that T-Mobile’s petition to be designated as an ETC is in the public interest and should be approved.  Staff believes that public interest benefits of a particular ETC designation should be analyzed in a manner that is consistent with the purposes of the Act itself, including the fundamental goals of preserving and advancing universal service; ensuring the availability of quality telecommunications services at just, reasonable, and affordable rates; and promoting the deployment of advanced telecommunications and information services to all regions of the nation, including rural and high-cost areas. 

            Upon a decision by the Commission, staff will continue the necessary oversight to ensure that T-Mobile, along with all other ETCs in Florida, are upholding these principles and attaining the goals and objectives of both the state and federal universal service programs.  Therefore, staff recommends that T-Mobile be granted ETC designation status in the AT&T and Verizon non-rural wire centers listed in Attachment A of this recommendation.  If the Commission approves T-Mobile for ETC status, staff will review T-Mobile’s commitment to Florida’s Lifeline program during T-Mobile’s annual certification for High-Cost Universal Service Funds.

Issue 2: 

 Should this docket be closed?

Recommendation: 

 If no person whose substantial interests are affected by the proposed agency action files a protest within 21 days of the issuance of the order, this docket should be closed upon the issuance of a consummating order. (Murphy)

Staff Analysis: 

 At the conclusion of the protest period, if no protest is filed this docket should be closed upon the issuance of a consummating order.